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Focus On What Matters, Not Capital, is the Key Discipline, the Necessary Ingredient of Early-Stage Software.

November 28, 2022
Written by Dougal Cameron

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Customers screaming for features, employees demanding pet projects, competitors encroaching… These are the day-dream nightmares of early-stage software founders. The inputs and feedback hurl toward the founder like a swarm of mosquitoes. It is the perfect environment for stimulating high quick-start personalities with ADHD. It is chaotic. It is devoid of focus.

Capital is a necessary ingredient for any software startup. It comes in the form of sweat equity, actual equity, customer advances, or some other ‘bet’ on the company’s success. Focus, however, is a rarer commodity, the absence of which has far more dire consequences. Focus, not capital, is the key discipline, the necessary ingredient of early-stage software.

What is focus?

In 2016, Apple announced the iPhone 7 with an enhanced camera mode, the portrait mode. In portrait mode, the aperture is opened wide to let in more light and shrink the depth of field. This highlights the point of optimum focus and blurs the background. The result is aesthetically pleasing. This mode quickly became my preferred mode of capturing people in pictures.

It is counterintuitive that rendering parts of an image blurry will enhance the aesthetic appeal. Shouldn’t the purpose of an image create clarity everywhere? The reality is that our eyes are point-devices. They need stimuli contained and served up so that the focal point is known. Absence of this structure creates chaos; it breeds anxiety in the viewer.

Focus is the simultaneous act of clarifying the purpose while removing the extraneous. This dual process makes portraits beautiful because it enables the mind to take in the purpose and not lose itself in a sea of “nice-but-not-necessary” items. Focus is the efficient use of the scare resource: the mental capacity of the founding team and the mental energy of the customer.

Nothing is effective with sufficient dilution. The most potent poison can be consumed when diluted with enough inert material. To be effective, a founder must fight dilution. This is particularly true given the odds stacked against the founder from the outset. Focus is the only path to efficacy.

Why is focus rare?

Entrepreneurs are plagued with insecurity. We are confident that we can execute, but we are nervous about the elements we cannot control. This leads us to cultivate affirmations while ignoring criticism. An ugly byproduct of this is that we succumb to the shiny object syndrome a lot. This drives us to run down all avenues in pursuit of confirmation. This exhausts capacity and spends that scarce resource where it will have a counterproductive impact.

Also, founders fail to focus because it is hard work. It means actively ignoring inputs and holding onto an idea, a dream, through waves and storms. Default is almost always wrong because active value creation takes active work. Focus is not default. It takes a decision, and that decision requires cutting something; hence, it is cognitively expensive.

Proper focus takes empathy and humans are built for self-worship. Obviously, it is possible for a company to execute on focus but to do it on the wrong thing. Proper focus, i.e., focusing on the right thing, takes empathy, seeing the world through the eyes of another person. This empathy enables founders to know what is and what is not important. Absence of empathy leads the founder to think all things are important.

Focus is dramatic. The founder is the standard bearer of their view of how the world ‘will’ operate and the product is built for that future state. Focusing on specifics of that vision means contending with different visions. This contention comes from employees, partners, investors, customers, family members… Founders must engage in the drama and persevere.

Implications of focus

Cultivating focus has implications for how a company grows. Here are a few things I believe are necessary to have focus:

What you measure matters – you will optimize the business for what you are measuring. This is just like your eye optimizing to see the person in a portrait mode picture. The business will form itself around what you are measuring. Make sure to measure the thing you want to optimize.

Focus requires saying no and yes – focus is the simultaneous pursuit of purpose and honing of the extraneous. It requires both saying yes to the right things and saying no to the wrong things.

Focus breeds drama – the artist is the only true shepherd of the finished product. Usually, this isn’t dramatic in the process because the artist is also the implementer of the process that creates the finished product. Not so with software! Founders must communicate well and expect drama when focus is applied. Focus for a software company means that team members will need to yield their artistic autonomy to the founder and implement the founder’s vision.

Conclusion

The compound effects of focus are tangible. Focused founders have less technical debt, less team churn, less customer drama… less bad stuff all around. The effects aren’t just in preventing bad stuff either. Focus produces deeper customer experiences, deeper team buy-in and stronger revenue traction. These advantages are force multipliers in capital efficiency.

This article is an extract from a case study we published recently published titled “A Founder’s Journey Through Building a B2B SaaS Company“, written by Dougal Cameron that shares some of our experiences building startups and journeying towards meaningful exits.

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